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Sunday, December 19, 2010

Latimes.com: Theodore Roosevelt and the estate tax compromise

By Tim Rutten, LA Times December 18, 2010

Of the several objectionable provisions included in the tax compromise that congressional Republicans extorted from the Obama administration, none is more noxious than the one that all but guts the estate tax.

. . .Estate tax cuts, by contrast, create a whole new windfall for those who already enjoy privileges and security undreamed of by the vast majority of Americans.

The provision is the work of Arizona's John Kyl, the Senate's second-ranking Republican and a longtime advocate of abolishing the estate tax. To most eyes, the former estate levy didn't look like much of a burden; it allowed couples to leave their heirs$7 million tax free and taxed any additional inheritance at 45%.

Kyl's plan, . . .increases the exemption to $10 million for couples and reduces the tax rate on the rest to just 35%. The average windfall for the approximately 6,600 wealthy taxpayers annually affected by the estate duty will top $1.5 million.

Abolishing the estate tax has been a goal of some conservative Republicans since the 1940s. . .

(I)ts modern champion was a president the GOP used to regard as among the greatest the party has produced — Theodore Roosevelt. Like many thoughtful Americans of his era, he believed the disproportionate accumulation of wealth in the hands of a few would make a mockery of our meritocracy and, ultimately, of our democracy.

In 1910, he summed up those feelings:

We grudge no man a fortune in civil life if it is honorably obtained and well used," Roosevelt said. "It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community.... 

. . . Therefore, I believe in a graduated income tax on big fortunes, and … a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate.

 . . . Roosevelt's appraisal of the first Gilded Age is sadly resonant. "The man of great wealth owes a particular obligation to the state," he said, "because he derives special advantages from the mere existence of government."

Today Karl rove would call Roosevelt an advocate of class warfare. The US has become a plutocracy due to the tax policies of Ronald Reagan and the two Bush presidents.

When Bill Clinton was president, He did little to reverse the trend and the plight of the middle calls became worse. Instead of restoring the income tax tax tables to match the tax rates of the Carter administration, Clinton only went half way.

Obama will continue most of the errant Bush tax policies during his presidency. Rightardia agrees with the LA Times that "none is more noxious" than the Obama compromise on the Estate tax. that was instituted in 1915.

source: http://www.latimes.com/news/opinion/commentary/la-oe-1218-rutten-20101218,0,3912591.column


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